I have wanted to write this text for a long time but have put it off \u2013 for about ten years. There isn’t much to be gained by criticizing established concepts or institutions; it will upset people, it creates negative vibes\u2026 In the end, though, I decided it was worth it. Academic freedom isn’t granted to appease the mainstream, but to contradict it.<\/p>\n\n\n\n
Here is the thing: There is no such thing as Supply Chain Management (SCM). The term is as flawed as the concept it is supposed to represent. It is one of those bullshit terms that industry loves to adopt and then the media eagerly picks up. Industry loves bullshit: companies talk about Supply Chain Management, Big Data or Industry 4.0 without ever defining what these terms mean, without ever defining how they are different from the previous batch of terms they had used. And you know what? That’s okay. There are a lot of people in management positions who are not able to make any kind of substantive contribution whatsoever, so they need some fancy terms to fill the void. There are plenty of people who need to sell management consulting, and they need to create the illusion that the next big thing is just around the corner and companies (their potential customers) need to be prepared for it. And there are a lot of “journalists” with no technical training who have to feed the 24\/7 news stream and are grateful for buzzwords they can use to impress the few people left for their traditional media channel and to create a sense of importance of their work.<\/p>\n\n\n\n
It’s not <\/em>alright, however, if academics equally uncritically adopt ill-defined terms, teach them to students, name courses and even entire study programs after them. Technical terms serve as a shortcut reference to concepts which otherwise require many words to explain. Also, technical terms serve to increase clarity<\/em>. In the case of Supply Chain Management, neither function is adequately performed. \u201cBut if thought corrupts language”, <\/em>George Orwell warns in his 1946 essay \u201cPolitics and the English Language”, \u201clanguage can also corrupt thought. A bad usage can spread by tradition and imitation, even among people who should and do know better<\/em>\u201d. Hence, we have good reason to assess terms we frequently use, especially in education, so we can use \u201clanguage as an instrument for expressing and not for concealing or preventing thought<\/em>\u201d.<\/p>\n\n\n\n The first reason why there is no Supply Chain Management is that there are no supply chains. The metaphor ‘chain’ in ‘supply chain’ creates the mental model of a linear, sequential connection of organizations that does not exist in supply relationships. In fact, it is about as far from the truth as it gets. Instead, we are usually dealing with complex webs of interactions: Typically, a company, be it a manufacturer or a retailer, has many suppliers, each of whom in turn has many suppliers, and so on. This cascade of supply relationships does not resemble a chain.<\/p>\n\n\n\n If you think this differentiation is just an example of academic hairsplitting: it is not. It has real implications on the \u201cmanagement\u201d part of \u201csupply chain management\u201d. Because not only do companies compete for business and new customers in the market, they also compete for their suppliers\u2019 attention and their resources. They compete for supplier capacity. The reason why a company can run short of supply often is not necessarily general scarcity of raw material or general scarcity of supplier capacity, but prioritization decisions of suppliers in response to pressure from some of their (other) customers with particularly strong market power. These customers can be direct competitors (e.g., Samsung vs. Apple, Volkswagen vs. Daimler\u2026) or may come from entirely different industries (Apple vs. Daimler). When a company exercises its market power to nudge suppliers into reallocation of resources, then companies with less relative market power are at disadvantage. In earlier research (first in my Master\u2019s project, later in my PhD project), I found strong evidence for this effect in the automotive industry, in chemical processing, and in raw material trading. And I believe it is safe to assume that this pattern can be found in other industries where some buyers are powerful enough, and where some suppliers are dependent enough (dependency can be understood as the reverse of power) so that reallocation decisions on part of the suppliers can be enforced.<\/p>\n\n\n\n This effect, the impact on supply from outside the direct dyadic relationship between buyer and supplier which I call non-adjacent power regimes, cannot exist in \u201csupply chains\u201d, since the simplistic supply chain model does not allow for lateral impact. One of the reasons the automotive industry (the mighty OEMs, which supposedly should be able to \u201cmanage\u201d their \u201csupply chains\u201d) suffers from shortages of semiconductors these days is, just like 12 years ago during the last severe semiconductor shortage, that Apple is more important a customer for semiconductor producers than automotive firms. Lateral impact does exist, and supply chains don\u2019t. The supply chain model is not only useless, but it is misleading.<\/p>\n\n\n\n Alright, then: if we replace \u201cchain\u201d with \u201cnetwork\u201d, will all be good? Is supply network management a better term?<\/p>\n\n\n\n Hardly so. The second reason why there is no Supply Chain Management is that not only is the concept of \u201csupply chains\u201d flawed, but the idea that we \u201cmanage\u201d them is pure fantasy.<\/p>\n\n\n\n To begin with, almost no organization, not even the most powerful corporations, \u201cmanage\u201d anything beyond the first echelon of their network. If we look at the automobile industry, for instance, then OEMs, which are the most powerful actors in the network, hardly ever touch the second tier of suppliers. Why? Because it\u2019s impractical. Because there are too many. And because the pressure they exert on their first-tier suppliers to ensure reliable supply cascades across multiple echelons. Very rarely do OEMs get involved in selection and auditing of second-tier suppliers, let alone third-tier suppliers or any deeper echelon, but even then we would hardly consider this \u201cmanagement\u201d. So, companies don\u2019t \u201cmanage\u201d supply chains or supply networks; if anything, they \u201cmanage\u201d suppliers, and almost always only their first tier of suppliers.<\/p>\n\n\n\n Or do they? Is \u201cmanaging\u201d even the right concept? Collins dictionary defines management as \u201cthe control and organizing of a business or other organization<\/em>\u201d (Collins, 2021). Does any company \u201ccontrol and organize\u201d their suppliers? Unless the buyer owns the majority share of its suppliers, we can say with confidence that this is not the case.<\/p>\n\n\n\n Secondly, many organizations are not in a position to tell their suppliers anything<\/em>. The power-dependency relationships in supply networks don\u2019t normally play out this way. If you\u2019re BMW or Nestl\u00e9, you can negotiate with your suppliers, maybe even exercise your market power. If you\u2019re anybody of less significance, you cannot. You can kindly ask them if they would sell you something on their terms, but that\u2019s about it. If they reject your request, you have few options left. This is hardly news: Harland and Knight (2001) asserted more than 20 years ago that many organizations will merely \u201ccope<\/em>\u201d with their network, rather than actively \u201cmanage\u201d it. So, some companies, when they are powerful and important enough, can influence how their suppliers act. The rest copes with whatever their suppliers decide to do, certainly does not \u201cmanage\u201d them, and often can hardly influence terms and conditions for their supply relationships.<\/p>\n\n\n\n Thirdly, even when the ratio of power to dependency is favorable for the buying party, outside the world of meticulously planned supply of capital-intensive assembly processes many supply relationships are merely transactional. <\/p>\n\n\n\n Now, all the above statements are based on empirical evidence from more than four years of research. However, we don\u2019t even have to do any empirical research to get a sense of the lack of clarity and conceptual weakness of Supply Chain Management. Just have a look at the definitions and descriptions of SCM. Again, more than twenty years ago, serious researchers found the term Supply Chain Management ambiguous (Bechtel and Jayaram, 1997; Tan, 2001) and attested \u201cconsiderable confusion as to its meaning\u201c<\/em> (Mentzer et al.<\/em>, 2001). In college textbooks, we find unfounded fantasy claims such as \u201ceffective supply chain management involves the management of supply chain assets and product, information, and fund flows to maximize total supply chain surplus<\/strong>\u201d<\/em> (Chopra and Meindl, 2010, p. 23, emphasis added). I have yet to come across any organization that showed any <\/em>interest in \u201cmaximizing total supply chain surplus<\/em>\u201d. And has anybody ever reflected on the legal implications of that idea? Management has fiduciary responsibility towards shareholders of the company they work for, which renders the idea of intercompany-optimization pointless. Even back in 1997, the early days of the rise of SCM, it was obvious that there is a \u201cnormative tension between the is and the ought<\/em>\u201d (New, 1997), which has not changed since but apparently has not kept academics from repeating outlandish ideas like the one about “total supply chain surplus<\/em>“. <\/p>\n\n\n\n This romantic idea of selfless altruism will certainly appeal to academics and students who never spent a day in their life working in the industry, but certainly it is not a valid description of anything that\u2019s happening in supply-relationships, which for the most part are (a) dyadically organized and (b) staffed with people who are incentivized \u2013 and legally bound \u2013 to do whatever it takes to make the deal work out well for their <\/em>party. Experienced logistics professionals in interviews have shared with me that what they are reading in SCM textbooks does not resemble anything they observe in practice. As the above references to older publications show, there is much more than anecdotal evidence that indicates that the whole field of Supply Chain Management is mostly made-up nonsense. Even the Council of Supply Chain Management Professionals (CSCMP) now says that \u201cthe definition of what is a supply chain can be unclear<\/em>\u201d (Council of Supply Chain Management Professionals (CSCMP), 2021). Which is comparable to the pope saying that \u201cthe definition of what exactly we mean by \u2018god\u2019 is unclear<\/em>\u201d. Of course, it is not clear what a \u201csupply chain\u201d is \u2013 because it is a made-up concept without empirical roots. What else do we need to know to finally abandon the field and focus on real topics without fancy yet imprecise names?<\/p>\n\n\n\n It is beyond my understanding why we continue to teach such nonsense at universities around the world. As an academic field, Supply Chain Management does not have any solid foundation. As a professional field, it is the collective name of a bunch of jobs and activities that show little resemblance of the textbook definitions typically found. It has zero utility; in fact, I argue the term is harmful as it merely adds confusion and distracts from the actual tasks that can be found in (real) professional fields like purchasing, logistics, or even supplier management (where it applies). When I ask students in my lectures what they\u2019d like to do for a living after graduation, the most frequent response (other than \u201cI don\u2019t know\u201d) is \u201csomething in supply chain management<\/em>\u201d. This should ring an alarm bell. It is no surprise, however: The idea of \u201cmanaging\u201d companies, especially \u201cglobally\u201d in the wake of the presumed \u201cincreasing globalization\u201d that is so frequently cited in introductions to second-rate bachelor theses, naturally seems attractive.<\/p>\n\n\n\n Academics are the very people who should question the utility of fancy terms rather than uncritically repeat them. Academics are the people whose job it is to add knowledge, which requires clarity of thought, which conflicts with vacuous bullshit lingo and unfounded claims put forth by people trying to \u201csell management consultancy<\/em>\u201d (Johnsen et al.<\/em>, 2008). As Vinsel (2021) puts it, \u201chigher education has become suffused with innovation-speak and business bullshit, using words to chase cash rather than to strive for accuracy and truth. In a real sense, such talk is a betrayal of the mission of universities<\/em>.\u201d Academia, however, it trusted by society, and therefore as academics we must make sure we don\u2019t fall for cheap marketing tricks and add to confusion, rather than reduce it. In his criticism of politicized language, Orwell (1946) emphasizes how important it is \u201dto let the meaning choose the word, and not the other way around<\/em>\u201d. With SCM (and the same seems to have been the case for the equally terrible \u201cIndustry 4.0\u201d), the impression one gets is that somebody made up a fancy expression and hundreds of academics subsequently tried to assign meaning to it, as in religious interpretation of holy scripts, thereby justifying its existence.<\/p>\n\n\n\n Obviously, Supply Chain Management is not the only nonsense term adopted by Academia, and I wish more academics would become conscious of the vague language they use and how it limits clear thinking. Anyway, it is a good place to start: Abandoning the pretentious and meaningless term Supply Chain Management will help increase clarity in logistics engineering and education.<\/p>\n\n\n\n Bechtel, C. and Jayaram, J. (1997), \u201cSupply Chain Management: A Strategic Perspective\u201d, The International Journal of Logistics Management<\/em>, Vol. 8 No. 1, pp. 15\u201334.<\/p>\n\n\n\n Chopra, S. and Meindl, P. (2010), Supply Chain Management: Strategy, Planning, and Operation, <\/em>4th global, Pearson, Boston, MA.<\/p>\n\n\n\n Collins (2021), \u201cDefinition of ‘management’\u201d, available at: https:\/\/www.collinsdictionary.com\/dictionary\/english\/management<\/a> (accessed 6 November 2021).<\/p>\n\n\n\n Council of Supply Chain Management Professionals (CSCMP) (2021), \u201cCSCMP Supply Chain Management Definitions and Glossary\u201d, available at: https:\/\/cscmp.org\/CSCMP\/Educate\/SCM_Definitions_and_Glossary_of_Terms.aspx<\/a> (accessed 6 November 2021).<\/p>\n\n\n\n<\/a>Supply Chain Management does not exist<\/h2>\n\n\n\n
<\/a>\u201cSupply Chains\u201d do not exist<\/h3>\n\n\n\n
<\/a>\u201cManagement\u201d of \u201cSupply Chains\u201d does not exist<\/h3>\n\n\n\n
<\/a>Concluding Rant<\/h2>\n\n\n\n
References<\/h2>\n\n\n\n